Your "Debt Ceiling"

Talk in Washington D.C. has centered around the "Debt Ceiling"
for weeks now. The debate has been dominating the news and everyone has
a different take on it. Despite the stance you take on the current negotiations,
all the hoopla and media attention has given us at least one positive.
We're at least talking seriously about our finances. As a business
owner this is a great reminder to take a thorough look at your business's
financial foundation. Factors such as the amount of debt you take on,
interest payments on that debt, and the amount of revenue you take in
are numbers that simply cannot be taken lightly. They can mean life or
death to your business. So it could be, as they say in Washington, "Time
to get your fiscal house in order."

As important as the numbers and financials are to the success of a business,
often entrepreneurs are quite complacent about them. One reason for this
is the fact that numbers are just plain scary. They have a way of telling
the business owner the truth, and the truth often hurts. So the entrepreneur
decides they will make up what they lack in financial analysis with enthusiasm
and gusto to make a business work. However, no amount of drive will ever
turn the color red in to black. It is important that we start liking the
numbers because they can be our best friend if we pay attention to them
and our worst nightmare if we ignore them.

So if you have to take on debt to start your business make sure you do
the research up front to determine the correct amount you will need. Too
much, and the interest and payments might put you under. Too little, and
you won't have enough to make the necessary moves to advance your
business. Make sure you bargain shop your debt just like any other part,
labor, or service. Do whatever is necessary to get the best interest rates.
Don't let your enthusiasm to get started overshadow the fact that
you'll be losing thousands long term with high interest rates. Also
take a fine tooth comb to your revenues. Are there places you can save
money in supplies and labor without risking quality? Are you charging
too much and losing market share, or are you charging too little and undervaluing
your service? Finally, my favorite question regarding revenue, "What
else can we make money on?" Nothing is more exciting than a new revenue
source. Employ these measures and ensure that deciding which bills to
pay will never be a subject at your board meeting.